NBC Universal Sets Sights Beyond CPMs

NBC Universal is exploring ways to move beyond charging advertisers on a CPM basis and instead offer a “pay for effectiveness” pricing model, President of Integrated Media Beth Comstock said during an address at Stanford University this week. The first step in doing so, she said, is to offer advertisers the ability to determine where exactly consumers are viewing its content, and then let them target desired demographics on whatever platform they’re using to access NBC content. To that end, the company is developing a system called TAMi, which stands for Total Audience Measurement interactive.

Speaking at a symposium entitled “The Future of Advertising in Digital Media,” Comstock said NBCU is working to offer pricing options beyond CPM, including a billing approach based on how effective the company is in helping marketers reach their target demographics.

“We were based on a CPM model, and that was fine in the past, but ultimately we would like to be paid [for] advertising effectiveness,” Comstock said. “It’s about delivering the right message to the right person at the right time, and television doesn’t do that now.”

To support the formation of future content tracking and advertising models, NBCU has been working on the TAMi system, which is meant to provide a complete view of where its content goes and how people interact with it. For instance, it will let the company track viewing of “Heroes” on broadcast television, cable, online, and on mobile devices like iPods, to find the total number of viewers.

NBCU is striving to create compelling creative content that goes beyond television shows to incorporate online content, feedback from viewers, games and other material that can be shared through multiple devices and through syndication, Comstock said.

“It’s not enough to create something in one place. You have to take that content and distribute it. You have to be able to distribute that content to almost 100 percent of the Internet,” she said.

NBC’s video expansion plans include a major video platform launch in conjunction with News Corp., announced earlier this year, which will distribute video far and wide online through distribution relationships with Comcast, AOL, MSN, MySpace and others. Comstock said NBC and News Corp. will take a hands-off approach to allowing content producers free reign to create new material.

“The working mantra is, imagine if some really creative folks from Fox and NBC Universal broke in and had access to all our stuff,” she said.

The company also has an ongoing relationship with YouTube to distribute some of its content free on the video sharing site. However, in discussing digital rights management (DRM), Comstock said she expects the company to retain copyright controls on its video content for years to come.

“It’s fun to think about [abandoning DRM], what would that mean, but at this point I don’t think it’s in the cards for the next couple of years,” she said. “How can you create a business without some kind of content protection with economics around it?”

Comstock also admitted that hers and other media companies are still in the early learning phase when it comes to advertising within online video, but she said NBCU understands the need to innovate around formats.

“The sad thing is to take a :30 spot and put it online and think that it’s done. It has got be more compelling, and we know that,” she said.

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